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Financial participation and voice in different economies: a comparative analysis of forms of participation
DRAFT PLEASE DO NOT QUOTE
Work in progress!
Any comments appreciated
Correspondence to Erik Poutsma
Paul Ligthart & Erik Poutsma
Institute for Management Research,
Radboud University
Nijmegen,
Netherlands
HYPERLINK "mailto:p.ligthart@fm.ru.nl" p.ligthart@fm.ru.nl / HYPERLINK "mailto:e.poutsma@fm.ru.nl" e.poutsma@fm.ru.nl
and
Chris Brewster
Henley Business School,
University of Reading,
Whiteknights,
PO Box 218
Reading
RG6 6AA
UK
HYPERLINK "mailto:chris.brewster@henleymc.ac.uk"chris.brewster@henleymc.ac.uk
Financial participation and voice in different economies: a comparative analysis of forms of participation
Abstract
This paper uses a cross-national database to test the relationship between different forms of participation - employee voice (collective bargaining, representative participation, direct participation through consultation and communication mechanisms); and financial participation (employee share ownership and profit sharing). The relationship between these constructs is explored using the notions of comparative capitalisms and institutionalism. We find that participation does vary with economic model and with a variety of demographic factors; but that the relationship between employee voice and financial participation is weak. Direct participation does have an impact but, overall, employee voice and financial participation, except in a small number of specific cases, appear to be independent phenomena.
Key words:
Employee voice; financial participation; employee share ownership; profit sharing; varieties of capitalism; comparative capitalisms; institutionalism
Financial participation in different economies
Introduction
The goal of this paper is to investigate the relationship between employee voice, in the form of indirect and direct participation, and the incidences of broad-based forms of financial participation: employee share ownership schemes (ESO) and profit sharing schemes (PS). New forms of participation have been propagated and emerged in many developed countries in recent years. A lot of these changes fall under the high involvement form of human resource management and often imply multiple channels of participation, delegation of responsibilities, or the replacement of more institutionalised, established forms by looser forms. Four significant debates are involved: the notions of employee voice; the notion of financial participation; the complementarity  or otherwise - between the two; and the social embeddedness of these approaches within different varieties of capitalism. Below we examine each in turn.
This paper therefore defines the terms and considers the relationship between them. Since we expected that institutional setting would affect the relationship we also discuss the comparative capitalisms literature. Then we explain the twenty nine country survey that we used to research these issues and present the relevant findings. Finally we explore the implications of the findings for theory and practice.
Definitions
Employee voice covers collective bargaining, representative participation, and direct participation through consultation and other kinds of communication. Definitions of employee voice abound: from formal institutional representation to informal day to day participation of employees; and on different levels: from collective bargaining to job enrichment. For the moment, we define voice as a process that allows employees to exert some influence over their work and the conditions under which they work (Strauss, 1998: 15), We distinguish between mechanisms of indirect and direct participation in this process. Indirect participation covers collective bargaining, which allows for influence on the general terms of work, and representative participation through union representation, works councils and joint consultation committees, allowing influence over the more detailed terms and conditions of work within organizations. Direct participation through consultation and communication allows for influence on the terms and conditions on the personal or job level (Wilpert, 1998: 54).
Employee voice is hotly debated: does the term mean the same thing in different contexts (Gollan et al, 2006)? Are direct participation via consultative arrangements an attempt to undermine the independent employee voice provided by trade unionism or do they supplement it (Brewster, et al., 2007; Lansbury, 1995; Wood and Fenton-OCreevy, 2005? The debate is focused on the belief that efficiency is associated with direct forms of participation and that indirect participation is limited in its contribution to organisational outcomes. Indirect participation is less likely to be a company initiative than a response to external pressures, such as trade unions or legal requirements that may force the introduction of representative institutions, such as works councils. However, companies may benefit from indirect participation in several ways (see, for an overview, Gollan and Markey, 2001).. Collective bargaining may mitigate industrial conflict. Employees may be more likely to accept decisions that they helped to make through their representative bodies. Deliberations between employee representatives and management may improve the quality of decisions. Finally, representative participation may improve employeemanagement relations more generally.
Much of the rhetoric in this debate about indirect and direct participation is based on the view that conflicts of interest between labour and capital have been overcome. Trade unions and organised interests as bearers and coordinators of individual desires and views are considered less important or even considered as a constraint for the objectives of the organisation (Nienhueser, 2011). It was presupposed that employees' representative participation was an obstacle to individual or direct participation. Under the umbrella of high performance work systems, the individual employee became the companys prime resource; human resources should be deployed or managed on the basis of competence, not power, and this competence should be released through greater autonomy. Direct participation may encourage employees to coordinate their work tasks without supervision, thereby saving management time. Joint problem-solving in production/ service delivery may facilitate organizational learning, leading to higher quality human capital and greater efficiency. The consequence of this thinking was a strong consensus orientation (in practice and research) (Keegan and Boselie, 2006) and arguments for democratisation became to a large extent arguments for more efficiency (Boselie, et al., 2005).
However, managerial approaches to employee involvement may take a broader approach to indirect and direct participation. Research in the UK revealed a positive mood towards both state regulation and trade unions among managers, with several adopting the language of partnership (Guest and Peccei, 1998; Gollan 2001). Employee voice through trade unions or direct participation is taken for granted and is considered valuable in so far as it added value to the business (Marchington 2001; Ackers, et al., 2006).
There are other arguments that suggest a more profitable combination of indirect and direct participation. The development of direct participation with its responsible individual autonomy and teamwork may have had negative outcomes due to a possibility of exploiting individual employees to unhealthy levels (Busck, et al., 2010; Kalleberg, et al., 2009). In addition, direct participation and, as a consequence, individual flexibility in working conditions and labour terms, appears rather more costly to organise than the standardised agreements that come with collective representation. As a consequence, employers as well as employees may seek collective regulations safeguarding flexibility and security in the workplace: what Hagen and Trystad (2009) call local flexicurity. A study of public services Marsden (2007) notes the value of a complementary collective voice for procedural justice guiding individual employee voice in the development of certain system changes like performance management. Knudsen, et al., (2011) found that the best work environment, measured as psychosocial well-being, was found at workplaces with the highest levels of participation, including both direct and collective participation.
Financial participation covers two generic forms: employee share ownership and profit sharing. Profit-sharing, in the strict sense, means the sharing of profits between providers of capital and providers of labour by giving employees, in addition to a fixed wage, a variable part of income directly linked to profits. Contrary to traditional bonuses linked to individual performance (such as piece rates), profit-sharing is a collective scheme applied to all or to a large group of employees. In practice, profit-sharing can take various forms. At the enterprise level, it can provide employees with immediate or deferred benefits; it can be paid in cash, enterprise shares or other securities; or it can be allocated to specific funds invested for the benefit of employees.
Employee share ownership provides for employee participation in enterprise results in an indirect way (on the basis of participation in ownership), either by receiving dividends or by the appreciation of employee-owned capital, or a combination of both. Employee share ownership can take many different forms (for an overview see Kaarsemaker, et al., 2012). Typically, a portion of company shares is reserved for employees and offered at privileged terms. Or employees are offered options to buy their companys shares after a certain amount of time, under favourable tax provisions, either through stock bonus plans or stock options plans, or immediately. Alternatively, an employee benefit trust is set up through employee share ownership plans (ESOPs), which acquire company shares that are allocated periodically to each employees ESOP account. Employee share ownership can be built up by a savings plan with contributions (allocation of stock options, part of wages and/or cash savings) from employee and/or employer. These have become known as Save-as-you-earn schemes and are most common in the UK and Ireland.
Financial participation is also much debated. Ben-Ner and Jones (1995) view financial participation as return rights which they contrast with control rights. Return rights relate to claims to residual income, such as profit sharing, while control rights refer to a degree of control or voice. Although employee share ownership suggests a degree of control rights, in practice these schemes usually offer very little or no real employee voice. Financial participation is not always democratic; it can be narrow-based, restricted to a small number of senior managers, in contrast to broad-based, spread throughout the firm (Pendleton, et al., 2001). It has been seen as a valuable tool for rewarding participative employees to increase outcomes (Blasi, et al.,, 2003) but also as a contribution to keep the unions out or reducing their influence (dArt, 1992).
The debates around financial participation developed with significant business initiative in the 1980s to experiment with employee financial participation.
The reasons for adopting a financial participation scheme differ. Profit sharing schemes appear to be adopted mainly for the shorter term productivity effects that they may deliver. Employee share ownership plans aim to address longer term objectives such as alignment and more commitment to company goals, while schemes that offer options may provide both productivity and retention of employees (Poutsma and Van den Tillaart, 1996). It must be noted that in many cases profit shares and shares or options are not evenly distributed among personnel. These schemes are often focussed on key personnel and even in case of broad eligibility schemes may have a distribution pattern related to salary levels or other job position factors (Pendleton et al,. 2001). Whether the schemes achieve their objectives is contentious.
The debates
One focus of this paper is on the debates concerning the complementarities between voice and financial participation which remain, with few exceptions (Poutsma, et al., 2003; Poutsma, et al.,2006; Croucher, et al., 2010), empirically unexplored. Is employee voice correlated with financial participation or does it inhibit it? If the two work together then increases in either will be an increase in employee democracy and participation; if the two tend to be substitutes then those involved may need to be careful.
The relationship between the different forms of participation has been an enduring issue in industrial relations and HRM writings. The main focus has been on the relationship between representative participation and direct participation (Brewster, et al., 2007; Brewster, et al., 2007), while the relationship between financial participation (employee share ownership and profit sharing) and the two other forms has only been highlighted more recently. The relationship between voice and financial participation has assumed greater prominence in Europe through a combination of governmental and European Union attempts to promote financial participation and developments in industrial relations institutions (such as the decentralization of collective bargaining and the introduction of the consultation Directives). A topical question is whether the interaction between channels is a phenomenon that will exist under different types of collective bargaining regimes, especially the decentralized forms (Kalmi, et al., 2012); and amongst the different combinations of direct participation, representative participation and financial participation.
The relationship between the forms of participation in terms of employee voice and financial participation has emerged as a key issue in discussions of financial participation and its outcomes. It has been argued (Aoki, 1990) that companies adopt direct participation practices for reasons of dynamic efficiency and organizational capabilities. In order to sustain and develop these capabilities financial participation may provide for a return on such investments in human and social capital made by employees (Blair, 1995; Blaire and Kochan, 2000). Financial participation may be perceived as the reward for becoming more involved in the firm and hence may be seen as a pay-off for direct participation (Levine and Tyson, 1990), whilst involvement in a financial participation scheme may stimulate demand for greater communication and involvement in work decisions (Kato and Morishima, 2001). Finally, a perceived willingness of management to share information may signal to employees that managerial motives for a financial participation plan are not opportunistic. This may enhance a higher level of commitment and trust.
The ability of financial participation to improve firm performance, by decreasing labour-management conflict and serving as a collective incentive to improve workplace cooperation, information sharing and organizational citizenship behaviour may be limited by the free-rider problem when rewards are shared with co-workers. To counteract this problem and encourage higher performance, firms may combine employee ownership with employee participation in decision-making and other human resource policies to encourage a sense of ownership, draw more fully on worker skills and information, and create company spirit and work norms (Kruse, 2002: 71). Employee ownership and profit sharing align the interests of employees with the goals of the firm is supported by the mechanisms of teamwork, co-operation and information sharing, or what is called direct participation and employee involvement in decision making at all levels of the hierarchy, or what is called indirect or representative participation (Poutsma, et al.,, 2003; Kato and Morishima, 2002).
There is now a reasonable body of evidence to support claims that these forms complement each other and may have synergetic effects. Various reviews of the empirical evidence (Blinder, 1990; Doucouliagos, 1995; Jones et al., 1997; Kruse and Blasi, 1997; Kruse et al. 2004; Pщrotin and Robinson, 2003; Poutsma, 2001) conclude that complementarities between financial participation and other forms of participation have a beneficial impact on productivity and performance outcomes. Kruse et al. (2004) found that employee ownership and direct participation enhances peer control of shirking behaviour of co-workers, an important solution to the free rider problem. Other research observed a systematic coexistence of financial participation and direct forms of participation such as problem-solving groups and decision-making work teams (e.g. Festing et al., 1999; McNabb and Whitfield, 1998; Pendleton, 1997).
However, evidence on linkages between financial participation and indirect representative participation is mixed. Representative participation is a complex phenomenon varying markedly with context. Trade unions may be hostile to financial participation if it is perceived as a management instrument to undermine employee representation. There are well-documented instances (see Ramsay, 1977) of the use of financial participation to discourage employee participation in unions or to circumvent collective bargaining (Neumann, 1997). Alternatively, financial participation may be sucked into productivity bargaining at company or workplace level as a pay-off for workforce agreement to productivity initiatives. Some studies find that financial participation is more prevalent in unionized environments (Conyon et al., 2001; Gregg and Machin, 1988; Pendleton, 1997) and others find the opposite (Festing et al., 1999; De Varo and Kurtulus, 2006; Heywood et al., 1997).
There are two notable research results that shed another light on the complementarities. Robinson and Zhang (2005) found little evidence to support the notion that an employee share ownership contributes to the protection of valuable human capital; instead they re-emphasize the influential and independent role that ESOPs play. Of the seven non-contractual arrangements analyzed, only the size of trade union membership provided any, albeit statistically weak, evidence that it may complement the workings of employee share ownership. In this regard, trade unions may strengthen the perceived weak voice and control element of employee share ownership as well as provide broader safeguards in terms of wages, working conditions and employment stability, which are required if these valuable investments in human capital are to be made.
Kalmi, et al., (2005) used the level of participation in equity based plans and found that higher participation is associated with more successful outcomes in such plans, but not in profit-sharing.. None of the other forms of employee participation was found to contribute to the success of financial participation. The main message from this research and that of Robinson and Zhang (2005), is that the effects of employee share ownership develop more or less independently of other forms of employee participation.
Complementarities between financial participation and indirect participation are less obvious. There is little evidence to date of representative involvement in the design of financial participation. UK evidence indicates that collective bargaining and financial participation usually operate independently, even though both may be present (Pendleton, 2005). It is possible, though, that there are differences between types of financial participation. Profit sharing may be seen as a form of rent sharing that readily fits with the practice of collective bargaining. Employee share ownership, on the other hand, can be seen as occurring in the ownership domain of the company and thus is quite distinct from employment and its regulation.
The second focus of the paper is on forms of participation under different business regimes. Maybe the understanding of financial participation and employee voice, and the link between them, is mediated by the business system in which they operate. Is, for example, this link different in kind or extent between the stock market based Liberal Market Economies (LMEs) of the Anglo-Saxon countries and the Co-ordinated Market Economies (CMEs) of continental Europe, with their statutory support for works councils and trase unions (Hall and Soskice, 2001)? Or are there variations within the Co-ordinated Market Economies of continental Europe (Amable 2003; Wood et al 2009; Whitley 1999)? Or is each country distinctive? So far, the evidence base is limited, primarily because most studies have drawn on data from single countries (e.g., Ackers, et al., 2006; Gonzales Menendez, 2011). Arguably, some countries may have made relatively less use of financial participation than others because they have developed alternative means of securing employee consent and commitment. Representative participation and financial participation may therefore function as substitutes for each other rather than complements. Indications for this are found for the lower levels of financial participation and elaborate levels of representative participation in Sweden and Germany and a closer complementarity between representative participation and financial participation plans may be anticipated in those countries with more extensive legal regulation of both representative participation and of financial participation, as is shown in France (Poutsma, 2001). .
The concept of sharing profits or other assets with employees is necessarily related to the profit-based private enterprise system; so it is not surprising that the LMEs are generally where financial participation has flourished (Pendleton et al. 2003). The most obvious examples are the USA and the UK, where profit-sharing, gain-sharing, savings plans, share-based plans and employee share ownership plans (ESOPs) have become relatively widespread on a voluntary basis, with some government encouragement through tax laws (Blasi, et al., 2003). In the CMEs, employee financial participation has been more influenced by government policies attempting to encourage asset accumulation, a wider distribution of the ownership of capital or profit-sharing (Poutsma, 2001). In part, the growing privatisation of State-owned companies has contributed to wider employee ownership, especially also in Central and Eastern Europe, although in recent years employee share ownership largely vanished and transferred into management shares (Mygind, 2012).
The complementarities discussed above may operate differently in different contexts. For example, the well understood difference between countries in industrial relations regimes (Bamber et al., 201; Barry and Wilkinson, 2011; Nieneuser and Warhurst, 20121) may affect the relationship with financial participation. If a country has a well-developed works council system for instance do employees need equity plans in order to have a sense of participation in the company? Equally, a closer complementarity between representative participation and financial participation plans may be anticipated in those countries with more extensive legal regulation of representative participation.
The relationship between financial participation and collective bargaining structures is a controversial issue in Europe, especially in those countries where unions believe that financial participation is being used to force decentralisation of bargaining arrangements (Pendleton and Poutsma 2004). A key issue tackled in this paper is whether financial participation is more prevalent in centralised or decentralised bargaining systems. One prediction is that financial participation is more common in decentralised bargaining settings because centralised bargaining generally constrains firm-level pay initiatives. However, and alternatively, financial participation may be relatively attractive where there is centralised collective bargaining because it provides some firm-level flexibility in remuneration. In the call for more performance related pay, financial participation may be part of the bargaining agenda.
One set of explanations of the differential nature of the take-up of financial participation can be adduced from the Varieties of Capitalism (VoC) literature (Amable, 2003; Hall and Soskice, 2001; Whitley, 2001). As one attempt to use eclectic evidence to provide an over-arching theory, the VoC literature applies to much more than financial participation: indeed, it only refers to it tangentially. However, this literature has led to a re-examination of corporate social responsibilities, and a focus on the relationship between finance, modes of corporate governance and ways of relating to labour and its institutions (Gospel and Pendleton, 2003).
Authors in the VoC tradition - and authors such as Dore, 2000, and Lincoln and Kalleberg, 1990 - argue that amongst the developed capitalist economies there is a crucial difference between LMEs, where stock-markets are more pervasive and visible and play a significantly greater role in firm behaviour. Shareholder rights are considerably stronger than those of other stakeholders, including employees. Investor behaviour is less patient (Dore, 2000), with more adversarial competition between firms, leading, inter alia, to a search for ways to align managerial (and sometimes employee) interests to those of the shareholders. Hence, apart from the obvious logic that any kinds of share scheme are much more likely to be found where stock markets are more dominant, employee share ownership schemes are more likely to be encouraged by the state in LMEs. Both employee share ownership and profit sharing schemes may be more likely to be encountered in liberal market settings: employers need to compete, their organisations are focused specifically on the interests of shareholders and action therefore has to be taken to ensure that either managers or (in some companies) employees interests are aligned with the shareholders interests.
The VoC theories include employee representation and voice as one of the features distinguishing one form of capitalism from another (Whitley, 1999). The level, depth and meaning of employee participation and voice will vary markedly with different forms of capitalism (Brewster et al, 2007; Szabo, 2006), but in LMEs employee voice mechanisms are likely to be very much weaker and more individually orientated (Gospel and Pendleton, 2003). .
The dichotomous LME/ CME scale has been critiqued. Such accounts have limited utility in explaining, for example, the ex-communist Emergent Market Economies (EMEs) of central and eastern Europe and the Mediterranean Mixed Market Economies (MMEs): (Hanckщ, Rhodes and Thatcher, 2007). These are economies which, whilst importing features from the LME and, to a lesser extent, the CME models, retained many distinct features. In many respects, all these categorizations represented stylized ideal types, with only limited supporting evidence being provided beyond broad recourse to macro-economic trends, supplemented by limited case study based evidence (see Thompson and Vincent 2010). In contrast, a 2003 study by Amable (2003) brings to bear a very much wider range of supporting evidence, ranging from labor market features through training to product market competition, to derive five categories. These include the LMEs anmd the CMEs (the Rhineland economies plus France or continental European capitalism) meso-corparatist Japan, , the Mediterranean economies, and the Nordic social democratic capitalism. In contrast to the expectations of Hall and Soskice (2001) some of these economies are neither LMEs nor CMEs but are nevertheless successful.
As we have noted above, the interplay between forms of employee voice and financial participation in these different contexts will be complex.
Pulling these debates together, we advance and test the following propositions:
Direct participation and representative participation are substitutes for each other. Where one is used extensively the other will not be.
a). The link between voice and financial participation is a weak one; and b), if it exists, it will be limited to direct participation rather than representative participation.
Financial participation and direct participation is mainly found under lower levels of bargaining.
Market economy moderates the relationship between forms of voice and financial participation
Sample, Measures and Methodology
These propositions are tested using multi-level modelling techniques on the company-level data from the Cranet survey 2004/5. Cranet is an ongoing, collaborative network of HRM researchers from a wide array of countries. In the survey, senior HRM practitioners were asked to respond on items that operationalised HRM policies, practices and performance in the organisation. Organisations participating in this survey broadly matched the economy of each country involved (for a detailed description of the sampling procedure, see: Brewster et al., 2004 and Brewster et al., 2011). For this study, organisations were excluded from further analyses if they were: (a) public or semi-public, and (b) employed less than 100 employees. Response rates for the individual countries varied between 12 and 35 percent, acceptable for full population surveys, and analyses indicate no non-response bias.
The primary interest of this study lies in untangling the relationship between multi-level phenomena of employee participation: in particular the relationship between employee voice and the incidence of financial participation. For each type of financial participation we assess the extent to which it is offered across the company. Representative participation is measured by the presence of a joint works council in the company and the companys recognition of trade unions representing employees in collective bargaining agreements. Direct participation is measured with respect to three domains of participation: on issues of strategy, financial performance, and organisation of work. A companys score on each domain depends on the number of the employee groups (managers, professional and technical specialists, clerical, manual) included in employee briefings on these topics. It thus includes a measure of coverage. The scores for each domain range from 0 to a maximum of 4.
At the institutional level, this study distinguishes two related phenomena. First, building from the comparative capitalisms debates we distinguish, based on the country in which the organisation is located, the relevant type of market economy: LMEs and CMEs, the Nordic and Mediterranean market economies, and the transition economies of the Central and Eastern European states (see Appendix for listing). We included a check, for each organisation, of their degree of representative participation, and decentralised bargaining.
The study also includes some corporate characteristics as control factors: sector of operation, based on the EU NACE categories (Industry), the (logarithm) number of employees (lnSize), the companys stock market listing, the (multi)national character of the company, and the proportion of unionisation of the employees.
Descriptives
Table 1 summarises the descriptives of the corporate characteristics and the different forms of participation and its indicators. Table 2 presents correlations between forms of direct participation and financial participation.
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Companies analysed in this study are mainly national based firms, mostly active in the manufacturing or service industry. Most companies are not stock-market listed; they employ on average 2049 persons (log 6.27).
The average degree of unionisation in these companies of more than 100 employees is 33%. Representative participation can be found in companies in the strongest form, in 40% of cases. The level of collective bargaining by companies themselves takes place mostly at the company or site level. On average, companies are less active in centralised levels of collective bargaining, i.e. at the national or regional level.
Direct Participation is measured in three domains of which the briefing on the organisation of work is most widely available in companies. On average, companies offer these briefings to three different employee groups.
Financial Participation is offered to employees by a substantial group of companies. Generally, more companies offer their employees Profit Sharing (PS) than Employee Share Ownership (ESO). Broad based ESO is offered in 28% of the companies, whereas broad based PS is available in 33% of the companies analysed.
Because this analysis includes company-level data of firms (N=2549) nested in 29 countries, the nested structure of the data is taken into account by using a multi-level random-intercept regression model (Rabe-Hesketh & Skrondal, 2005). By conducting a multi-level analysis using countries as a random factor, the fixed parameters effects are controlled for the specific country effects. The analyses are done using STATAs (v10.1) program GLLAMM (Rabe-Hesketh & Skrondal, 2004).
To investigate the relationship between employee voice, in the form of indirect and direct participation, and the incidences of financial participation two analyses are conducted. The first analysis explored how the different channels of indirect participation are related to the extent of direct participation by employees in companies. The second analysis assessed how both indirect participation and direct participation affect employees financial participation.
Results
The results of the first analysis of direct participation are shown in Table 3. Significance is reached at levels lower than .05.
Employee voice
Table 3 shows the findings for direct participation and shows substantial differences among the market economies. Most clearly, the Mediterranean economies deviate from the liberal economies by having on average fewer briefings on strategy and financial performance, but more briefing on the organisation of work. Companies in the Nordic market economies stand out by having more briefings on financial performance issues. The CMEs in Western Europe do not differ significantly at all from the liberal market economies concerning the direct participation of employees in companies.
Representative participation in companies appears to have mainly positively effects on direct participation on financial performance issues. Direct participation on strategic issues and on organisation of work is not affected by representative participation.

A decentralised level of collective bargaining, i.e. corporate or site level bargaining rather than sectoral or national bargaining, increases the usage of briefings on strategy and financial performance issues. This is not the case with respect to the briefings related to the organisation of work, which is positively affected only by organisations that are covered by national level of collective bargaining.
Looking at moderation effects, the relationship between representative participation and briefing on strategy is weaker in CMEs than in LMEs. Similar weaker relationships are found in Mediterranean and CEE economies between representative participation and briefings about the organisation of work and in Nordic countries between representative participation and briefing on financial performance.
Moderation effects of market economies on the relationship between level of collective bargaining and forms of direct participation show a complex pattern. While the main effect of national level bargaining on financial performance briefing is negative, compared with the situation in LMEs, national level bargaining in CMEs, Nordic and CEEs shows positive associations with financial performance briefings. While the main effect of firm level bargaining is positively associated with more broad based strategy briefing, in Mediterranean and Nordic economies firm level bargaining is negatively associated.
Some of the corporate characteristics affect direct participation negatively. Companies in the banking, and services sectors, show fewer briefings on organisation of work than companies in the construction industry. Large companies show mixed results on direct participation. That is, they have more broad based briefings on strategic issues, but fewer briefings related to the organisation of work. Stock-market listing increases broad based strategy and financial performance briefings in companies. Unionization has no effect. Also the presence of briefings in any domain increases the likelihood of briefings in other domains. Overall, direct participation is widely affected by the different channels of institutionalised participation as well as by the characteristics at the level of the company.
Financial Participation
The effect of representative employee voice on financial participation is less pronounced than that of direct participation. The results of analyses are shown in Table 4